Chilling Move: Tether Freezes Tokens in the Face of Sanctions, Unveiling Wallet Mysteries and a Hack Connection

Tether, the company synonymous with the world’s largest stablecoin, made headlines with its recent announcement of freezing tokens held in wallets associated with individuals on the U.S. Office of Foreign Asset Controls (OFAC) list of sanctioned individuals. Characterizing the move as a preemptive measure to thwart potential misuse of Tether tokens and bolster security, the company triggered a cascade of reactions within the crypto community.

According to blockchain data sourced from Etherscan, Tether followed through on its announcement by freezing a total of 161 Ethereum wallets. Intriguingly, 150 of these wallets currently harbor no USDT tokens, leaving the crypto community speculating on the historical presence of Tether tokens in these now-frozen addresses.

The remaining 11 wallets, however, hold a substantial cache of over 3.5 million USDT tokens, with a significant bulk—3.4 million tokens—concentrated in just one address. Notably, blockchain investigator ZachXBT has linked this particular address to a recent hack targeting the popular betting platform Stake. The implicated wallet exhibited high activity shortly before the freeze, engaging in hundreds of transactions over the past week.

Of the other wallets still containing USDT tokens, two addresses boast around 20,000 tokens each, while a third holds nearly 60,000. The rest maintain smaller sums, with one frozen wallet containing a mere 16 cents in USDT. A noteworthy event occurred two days before the freeze when this seemingly inconsequential wallet was used to transfer over 400,000 USDT received from THORChain through two intermediary wallets, creating a labyrinth that complicates the tracking of funds. Interestingly, neither of the two wallets employed in routing the USDT appears to have faced Tether’s freezing action.

The possibility arises that these wallets harbor USDT tokens on diverse chains, including Ethereum Layer 2 networks. A scrutiny of Polygonscan data revealed two wallets with USDT on Polygon, though their combined holdings amounted to just over 10,000 tokens, and one wallet also retained USDT on Ethereum’s mainnet. Similar investigations on Arbitrum and Optimism failed to yield any wallets with USDT balances from the sanctioned list.

Despite the magnitude of these developments, Tether has maintained silence in response to requests for comments from The Block, leaving the crypto community eager for further insights into the motivations and implications of this sweeping freeze.

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Maria Irene
Maria Irenehttp://ledgerlife.io/
Maria Irene is a multi-faceted journalist with a focus on various domains including Cryptocurrency, NFTs, Real Estate, Energy, and Macroeconomics. With over a year of experience, she has produced an array of video content, news stories, and in-depth analyses. Her journalistic endeavours also involve a detailed exploration of the Australia-India partnership, pinpointing avenues for mutual collaboration. In addition to her work in journalism, Maria crafts easily digestible financial content for a specialised platform, demystifying complex economic theories for the layperson. She holds a strong belief that journalism should go beyond mere reporting; it should instigate meaningful discussions and effect change by spotlighting vital global issues. Committed to enriching public discourse, Maria aims to keep her audience not just well-informed, but also actively engaged across various platforms, encouraging them to partake in crucial global conversations.

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